Good day and thank you for standing by. Welcome to the Q2 2021 Kingsoft Corporation Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to our first speaker today, Ms. Francine Liu. Please go ahead.
Thank you. Ladies and gentlemen, good evening and good morning. I would like to welcome everyone to our 2021 Q2 and interim results earnings call. I'm Frenxi Liu, the IR Director of GenSoft. I would like to start by reminding you that some information provided during the earnings call may include forward looking statements, which may not be relied upon in the future for various reasons.
These forward looking statements are based on our own information and information from other sources, which we believe to be reliable. Please refer to the other publicly disclosed documents for detailed discussion on risk factors, which may affect our business and operations. Having said that, please allow me to introduce our management team who joined us today. Mr. Zou Tao, our Executive Director and CEO and Mr.
Brent Zing, our Executive Director and CFO. Now I'm turning the call to Mr. Zou. Zou
I'll
do the translation for Mr. Zou. We maintained a steady performance in all businesses in the first half of 2021. Kingsoft Office Group sees the opportunity for digital transformation and will continue to pursue the strategy of multi screen, cloud, content, AI and collaboration. In the online game business, we continue to focus our strategy on premium games, increase our investment in R and D and continuously expand new game genres.
In the first half of twenty twenty one, our total revenue came in at RMB3,039 million, up 17% year on year, and our office software and service business recorded a strong year on year growth of 70%. With the robust revenue growth of office software and service business, our total revenue in the Q2 was RMB1480 1,000,000, up 4% year on year. Now, I will turn the call to Francis, our CFO.
Thank you, Fancy. Good evening, everybody. Kingsoft office achieved outstanding performance during the Q2. As a localization project has entered a mature period and customer demand increased significantly. Kingsoft Office Group continued to witness a strong revenue growth from localization project during the quarter.
With the enhanced synergy between the subsidiaries, Beijing Suwao Technology Limited and King's Office Group, the fixed May Out Document Form as standard has been increasingly adopted by the market, further optimizing the localization business ecosystem. As a premium service provider of cloud and collaboration office solutions, we effectively promoted the cloud service migration and penetration in the government and enterprise market and it brought us strong year on year revenue growth for the sustainable licensing business. Kingsoft Office Group has also continued to develop the micro, small and medium sized enterprise market. As of June 30, 2021, over 1,000,000 of micro, small and medium sized enterprise covering 19 industries are registered user of WPS Plus. Kingsoft Office Group organized the 2021 Office Application Developer Conference in June and launched Document Open Platform, our first product enabling global office application developer to facilitate a digital office as well as digital transformation into government and enterprise market in China.
Meanwhile, King's Office Group has continued to optimize our user experience and improve its customer loyalty through the application of cloud and collaboration services. We continue to enhance the penetration within the public cloud market and promote the growth of subscription service business. During the quarter, Kingsoft Office Group launched various new functions for WPS membership services and further optimized the user experience. In April, Kingsoft Office Group organized a Content Ecosystem Conference in Wuhan and strive to promote the transformation of our core WPS products from the Office 2 to Office services. In the first half of twenty twenty one, Kingsoft Office Group began the transformation of Internet Advertising Business.
We took the initiative to further adjust the advertising strategy to reduce interruption from advertisement to users and enhance users' course platform collaboration experiences. During the Q2 of 2021, the Internet Advertising and Promotion Services business maintained a steady year on year growth with the increase in user base, while its proportion in office software and services business revenue continue to decline. In the Q2, the online game business continued to enhance the IP value of JX series to expand the development of the new game genre. In April, the JX-one Pocket mobile game was successfully released in Vietnam. Among all role playing games, the JX-one Pocket mobile game ranked it 1st on both IAS and Android download charts in the 1st month of its debut.
In May, the 1st person shooting game, Bullet Angel, was first released in Southeast Asia and got recommended by Google Play. In June, War of the Vision, Final Fantasy: Brave Exorcist, the latest game of the Final Fantasy series developed by Square Enix was released in China was recommended by Apple Store. In the coming quarter, the online game business will continue to focus on the long term development of classic IPs and promote the launch of new games. We will celebrate the 12th anniversary of JX Online 3 PC game and launch a new expansion pack to further strengthen the longevity and vitality of our core IP. In addition, JX World 3 mobile game will be launched within this year with a comprehensive upgrade in its visual design and gameplay.
I will now discuss the Q2 and first half of twenty 21 operation and financial results. I'm starting from Q2 using RMB as a currency. Revenue increased 4% year over year and decreased 5% quarter over quarter to RMB1418 million. The revenue speed was 47% for the online game and others and 53% for the office software and services. You notice that this is the first time that revenue of office software surpassed the revenue from our online game and others.
Revenue from our online games and other business decreased 22% year over year and 12% quarter over quarter to $693,000,000 The year over year decrease was mainly due to the decline in revenue from JAKKS Online 3 as a large scale expansion pack successfully launched and a relatively high base following the increased cost by the pandemic in the Q2 2020. The quarter over quarter decrease was largely due to the decreased revenue from existing games, partially offset by the revenue contribution from the new launch mobile games. Revenue from office software and services business increased 47% year over year and 2% quarter over quarter to RMB786 1,000,000. The year over year increase was largely due to both strong growth of licensing business and sustainable growth of subscription services business. The revenue growth of licensing business was driven primarily by increasing demand for localization as well as cloud and collaboration services from government and enterprise.
The increase of subscription service business was mainly due to the growing demand for cloud and collaboration services and enhancement of user stickiness from personal user. Cost of revenue increased 25% year over year and 11% quarter over quarter to $272,000,000 The increases were mainly due to the greater service and bandwidth courses as well as purchasing courses of services and product in line with the expansion business of Kingsoft Office Group. Gross profit cap flat year over year and decreased 8% quarter over quarter to RMB1208 1,000,000. The group's gross profit margin decreased by 3 percentage point year over year and 2 percentage points quarter over quarter to 82%. Our R and D expenses increased 36% year over year and 8% quarter over quarter to $532,000,000 The increases were mainly attributable to the increased personnel related expenses.
Selling and distribution expenses increased 61% year over year and 52% quarter over quarter to RMB310 1,000,000. The increases were mainly due to the higher personnel related expenses and an increase in marketing and promotion spending. Administrative expenses increased 31% year over year and decreased 10% quarter over quarter to RMB133 1,000,000. The year over year increase was primarily due to an increase in personnel related costs. The quarter over quarter decrease was primarily attributable to a decrease in professional services fees.
Share based compensation costs increased 11% year over year and 28% quarter over quarter to $441,000,000 And the increases were primarily reflected in new grant in awarded shares to the selected employee of certain subsidiary of the company in the Q2 2021. Operating profit excluding the impact of Eshop decreased 54% year over year and fifty percent quarter over quarter to RMB270 1,000,000. Net other gains were RMB48 1,000,000 compared with the losses of RMB105 1,000,000 in the corresponding period of last year and gain of $33,000,000 in the Q1 of 2021. The gains in the Q2 of 2021 were mainly due to fair value gains on financial instruments at fair market through profit and loss. The losses in the Q2 2020 were primarily due to loss of deemed disposal of an associate and the impairment provisions for certain investee companies.
We recorded share of losses of associates of $211,000,000 compared with share of losses of $173,000,000 for the Q2 of 2020 and a share of losses of $225,000,000 for the Q1 of 2021. The losses in the Q2 of 2021 were mainly due to the losses recognized in Kingsoft Cloud and Cheetah Mobile. Losses in the Q2 2020 and the Q1 of 2021 were mainly due to losses recognized in Kingsoft Cloud in this quarter. Income tax credit was $26,000,000 compared to the income tax expenses of $83,000,000 for the Q2 of 2020 $66,000,000 for the Q1 of 2021. Significant decrease were mainly attributable to the combined effect in the Q2 of 2021.
First, the recognition of test credit as certain subsidiary were qualified as rational key software enterprises for the year 2020. 2nd, the decrease in profit of online game business. And lastly, the specific deferral tax impact. As a result, the recent discuss about the profit attributable to the owners of parent, including those from continuing operation and a discontinued operation was $49,000,000 for the 3 months ended 30th June 2021, compared with the profit of RMB9151 1,000,000 and a profit of RMB117 1,000,000 for the 3 months ended June 30, 2020 and March 31, 2021 respectively. Profit to owner or parent excluding eShop was 72,000,000 dollars profit of $9,194,000,000 and a profit of $140,000,000 for the 3 months ended June 30, 2021, June 30, June 2020 and March 31, 2021 respectively.
And the net profit margin excluding Eshop was 5% 5 100%, 9% for the 3 months ended June 30, 2020 and March 31, 2021 respectively. I'm now in the first half of twenty twenty one. Revenue increased 17% year over year to RMB 3,039 million. Online games and others make up 49% and decreased 12% year over year to $1482,000,000 Office software and services make up 51% and increased 70% year over year to $1557,000,000 CV margin decreased by 1 percentage point year over year to 83%. As a result of the recent discussed about profit attributable to the owner of parent, including those from operating, continuing operation and discontinued operation was $165,000,000 and a profit of $9,158,000,000 for 6 months ended June 30, 2021 June 30, 2020 respectively.
Profit attributable to the owners of parent excluding Asia including those from continued operation and a discontinued operation was $211,000,000 compared to a profit of $9,249,000,000 in the prior year period. The net profit margin excluding eShop was 7% and 211% for the 6 months ended June 30, 2021 June 30, 2020 respectively. Our statement of financial position, we have cash resources of RMB 18,000,000,000 as of June 30, 2021. Net cash from operating activity was RMB 869,000,000 RMB 1308,000,000 for the 6 months ended June 30, 2021 June 30, 2020 respectively. In the first half of twenty twenty one, we achieved a stable performance of our core business.
Looking forward to the coming quarters, we'll continue to invest in R and D and technological innovation, enhancing technological capabilities and develop new products and services. We strive to bring the best experience to our user and customer, and we are committed to sustainable growth of our business, bringing the long term value in terms of returns of our customers and achieving a win win situation for our partner. We may now start the Q and A.
Hi, operator, we're ready for the Q and A session.
Certainly.